Beyond the rationality of economic man, toward the true rationality of human man

This paper reviews arguments concerning the deficiencies of economic rationality as a normative concept and develops an improved normative conception. Economists need to utilize a true rationality conception that includes not only instrumental rationality but rationality of ends. A decision cannot be truly rational unless a person is choosing what is really best considering (1) the long-term consequences of the individual's behavior, (2) the person's sense of morality, and (3) what gives the person real happiness. If true preferences represent what is really right for a person, then the ultimate rationality, true rationality, means choosing in line with true preferences.